Boeing capitalizing on aircraft demand

PadraicCassidy

NEW YORK (MarketWatch) -- Boeing Co.'s commercial aircraft manufacturing division is expected to show a healthy jump in third-quarter profit, with the period helped by strong momentum in jet orders and comparisons with a year-ago number that reflected costs to reach a deal with its striking machinists.

A year ago, Boeing said its machinists' strike cut 25 cents to 30 cents a share in its third-quarter earnings. Its revenue in the third quarter of 2005 was $12.6 billion.

The projected increase in sales is a result of a strong flow of airplane orders and deliveries for Boeing while its only jet manufacturing rival, Airbus, suffers repeated delays.

Boeing captured 1,002 net orders for commercial airplanes in 2005 and though 2006 orders are not yet at that pace, the plane maker has nevertheless filled up its order book for its new 787 through 2011. Airbus has been forced back to the drawing board, pushing back deliveries, to incorporate design changes to its 787 competitor, the A350XWB.

Merrill Lynch analysts have forecast a "conservative" 405 aircraft deliveries in 2006 for Boeing in a "robust" market for large regional and business jets. Boeing said in July it would deliver about 395 planes this year.

Boeing's defense business is also expected to grow, but not by as much. The company's shares have benefited from a run-up in the sector as expectations grew for additional 2007 spending for the U.S. military in Iraq and Afghanistan.

Citigroup analysts are forecasting Boeing military sales of $7.8 billion, an increase of about 5%, but with the company's space systems unit sales declining from the loss of a satellite imaging program to Lockheed Martin Corp.
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